Apparently, consumers were ready to spend more in May, despite deteriorating shopping conditions and poor sentiment.
The latest Consumer Checkpoint report from Bank of America (NYSE: BAC) showed that consumer spending rose 9% in May compared to the same period last year.
Specifically, Bank of America (BofA) used aggregate credit and debit card spending data from its 67 million consumer and small business customers to gauge sentiment. Additionally, credit card spending was up 16% year over year (YoY), while debit card spending was up 4%.
Shop till you drop
With energy prices soaring for most of the year, gas spending as a percentage of total card spending rose 7.8%, the largest such increase in 2022 was seen in February when gas purchases accounted for 6.4% of total card spend. .
Similarly, spending on services, which accounts for 60% of consumer spending, is rising, with the largest increase seen among households with annual incomes above $125,000 who spent the most on pent-up demand for travel and leisure. entertainment.
Equally important, David Tinsley, Senior Economist for the Bank of America Institute, summarized BofA’s perspective on data and consumer health in the United States.
“Our chart data shows continued growth in consumer spending, but inflation is testing household purchasing power. That said, spending on services like travel and entertainment remained strong, and households continued to have higher savings than before the pandemic. Overall, we still remain cautiously optimistic for the US consumer.
The US consumer appears to be doing well as spending increases on more “unproductive” endeavors such as dining out, entertainment, and leisure travel.
Likewise, increased spending goes hand-in-hand with the recovery in travel and could represent a market sector that is poised to benefit the most from a lackluster 2022 so far.
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